The U.N. climate conference was the first time that nearly every nation on Earth agreed to cut emissions. Will this agreement likely have any impact on GMIC and its future goals?
The latest call for action is being made by members of the Carbon Pricing Panel, including the Prime Minister of Canada, Justin Trudeau, President of Chile Michelle Bachelet, Prime Minister of the Federal Republic of Ethiopia Hailemariam Dessalegn, President of France François Hollande, German Chancellor Angela Merkel, and Mexican President Enrique Peña Nieto, together with Bank Group President Kim, IMF Managing Director Lagarde, California Governor Edmund G. Brown Jr., Rio de Janeiro Mayor Eduardo Paes and OECD Secretary-General Angel Gurría.
A Vision Statement accompanying their announcement charts out three steps that need to be taken to widen, deepen and promote global cooperation on carbon pricing. First, the number of countries and businesses that participate in a carbon pricing system needs to increase. Second, prices need to be significant enough to account for pollution as an operating cost, and incentives for investments in low carbon solutions need to be established. And third, better links between the various regional and national pricing systems already in place need to be set up.
Speaking at the high level CPLC meeting, the IMF’s Lagarde emphasized the value of cutting emissions.
“If the top 20 emitters in the world were to impose carbon charges that reflect only their domestic and environmental benefits, this would already reduce global emissions by over 10 percent,” she said.
United Nations Secretary-General Ban Ki-Moon, who is expecting a record number of heads of state and government to participate on April 22 in a signing ceremony in New York for the Paris climate agreement said: “We must put a price on pollution and provide incentives to accelerate low carbon pathways. Market prices, market indices, and investment portfolios can no longer continue to ignore the growing cost of unsustainable production and consumption behaviors on the health of our planet.”
Momentum for putting a price on carbon pollution is growing. Some 90 countries included mention of carbon pricing in their national plans, called the Nationally Determined Contributions, known as NDCs, prepared for the Paris climate change conference. In addition, more than 450 companies around the world report using a voluntary, internal price on carbon in their business plans and more plan to follow suit in the next two years. The number of implemented or scheduled carbon pricing schemes has also nearly doubled since 2012, amounting to a collective value of $50b.
The Carbon Pricing Leadership Coalition (CPLC), a global initiative that brings together more than 20 national and state governments, more than 90 businesses, and civil society organizations and international agencies, aims at garnering public-private support for carbon pricing around the world.
New partners joining the coalition include Côte d’Ivoire, Colombia, Finland and the United Kingdom; companies including Iberdrola, Rusal, and Tata Group; and Yale University.
Bank Group President Kim and IMF Managing Director Lagarde also convene the Carbon Pricing Panel, the high level leadership group that aims to spur further, faster action ahead of the Paris climate talks.